Market Overview

Trinity Biotech Announces Results for Q2, 2018

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DUBLIN, Ireland, July 19, 2018 (GLOBE NEWSWIRE) -- Trinity Biotech plc (NASDAQ:TRIB), a leading developer and manufacturer of diagnostic products for the point-of-care and clinical laboratory markets, today announced results for the quarter ended June 30, 2018.

Quarter 2 Results
                                                                                          
Total revenues for Q2, 2018 were $25.0m compared to $25.4m in Q2, 2017.

  2017
Quarter 2
2018
Quarter 2
Increase/
(decrease)
  US$'000 US$'000 %
Point-of-Care 4,350 4,019 (7.6%)
Clinical Laboratory 21,098 20,983 (0.6%)
Total 25,448 25,002 (1.8%)
       

Point-of-Care revenues for Q2, 2018 decreased by $0.3m. This was attributable to lower sales of HIV products in Africa due to the normal fluctuations which characterise that market, in addition to reduced HIV sales in the USA due to continued lower federal government spending in this area. 

Meanwhile, Clinical Laboratory sales for the quarter were $21.0m versus $21.1m for the corresponding period last year, thus representing a decrease of 0.6%.  This was due to higher diabetes and autoimmunity revenues being offset by lower Lyme revenues as a result of severe winter weather conditions in the north-eastern USA which extended into Spring thus delaying the start of the Lyme season. 

The gross margin for the quarter was 43.2%, which compares favourably to 42.5% achieved in Q2, 2017 This improvement was partly attributable to cost savings implemented during the quarter.

Research and Development expenses increased marginally from $1.3m in Q2, 2017 to $1.4m for the current quarter, whilst Selling, General and Administrative (SG&A) expenses decreased from $7.6m to $7.4m in the same period. Share option expense for the quarter increased from $0.1m to $0.3m due to an unusually low charge in Q2 of last year and caused total indirect costs to increase from $9.0m to $9.1m.

Operating profit fell slightly from $1.8m to $1.7m due to the increase in indirect costs, which was driven entirely by a higher share option charge this quarter.

Financial income for the quarter remained constant at $0.2m whilst interest payable, mainly arising on the Company's exchangeable notes, was also static at $1.2m.  Non-cash expenses were immaterial this quarter as the gain of almost $0.2m arising on a decrease in the fair value of the embedded derivatives associated with the exchangeable notes was offset by a non-cash interest charge of $0.2m.

The Company recorded a profit, excluding non-cash items of $0.6m for the quarter, which equates to earnings per share of 2.9 cents compared to 3.1 cents in the equivalent period last year. Fully diluted EPS for the quarter was 6.7 cents compared to 6.8 cents in Q2, 2017.

EBITDA before share option expense for the quarter was $2.9m.

Comments

Commenting on the results, Kevin Tansley, Chief Financial Officer, said "Operating profit fell slightly from $1.8m to $1.7m when compared to the equivalent quarter last year. The impact of lower revenues due to lower Lyme sales was offset by an improvement in gross margin from 42.5% to 43.2%.  However, indirect costs increased from 9.0m to 9.1m, though this increase was entirely driven by an increase in share option expense due an unusually low charge in Q2 of last year.  However, cash based indirect costs actually fell in the quarter.  This was partly driven by cost cutting measures implemented during the quarter, the impact of which will be more greatly felt in subsequent quarters.  Diluted EPS for the quarter was broadly flat at 6.7 cents, whilst year to date EPS was 13.9 cents compared with 11.7 cents for the first six months of 2017."

Ronan O'Caoimh, CEO of Trinity said "Whilst revenues were down 1.8% compared to Q2 last year our profitability was largely unaffected.  This was largely due to the impact of cost savings measures that we undertook during the quarter. It is of note that most of the measures were implemented midway during the quarter and hence we will not see their full impact until next quarter. In the months ahead we will continue to seek further cost savings. These measures are being driven by our objective to reach a cash flow neutral position for the company for the financial year 2019."

Forward-looking statements in this release are made pursuant to the "safe harbor" provision of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties including, but not limited to, the results of research and development efforts, the effect of regulation by the United States Food and Drug Administration and other agencies, the impact of competitive products, product development commercialisation and technological difficulties, and other risks detailed in the Company's periodic reports filed with the Securities and Exchange Commission.

Trinity Biotech develops, acquires, manufactures and markets diagnostic systems, including both reagents and instrumentation, for the point-of-care and clinical laboratory segments of the diagnostic market. The products are used to detect infectious diseases and to quantify the level of Haemoglobin A1c and other chemistry parameters in serum, plasma and whole blood. Trinity Biotech sells direct in the United States, Germany, France and the U.K. and through a network of international distributors and strategic partners in over 75 countries worldwide. For further information please see the Company's website: www.trinitybiotech.com.

 
Trinity Biotech plc
Consolidated Income Statements
 
(US$000's  except share data)   Three Months
Ended
June 30,
2018
(unaudited)
  Three Months
Ended
June 30,
2017
(unaudited)
  Six Months
Ended
June 30,
2018
(unaudited)
  Six Months
Ended
June 30,
2017
(unaudited)
 
           
Revenues   25,002   25,448   48,801   48,984  
           
Cost of sales   (14,194 ) (14,629 ) (27,565 ) (28,274 )
           
Gross profit   10,808   10,819   21,236   20,710  
Gross margin %   43.2 % 42.5 % 43.5 % 42.3 %
           
Other operating income   24   26   48   49  
           
Research & development expenses   (1,419 ) (1,322 ) (2,691 ) (2,651 )
Selling, general and administrative expenses   (7,358 ) (7,561 ) (14,298 ) (14,588 )
Indirect share based payments   (329 ) (130 ) (763 ) (380 )
           
Operating profit   1,726   1,832   3,532   3,140  
           
Financial income   196   196   401   373  
Financial expenses   (1,158 ) (1,169 ) (2,317 ) (2,339 )
Net financing expense   (962 ) (973 ) (1,916 ) (1,966 )
           
Profit before tax & non-cash items     764     859     1,616     1,174  
           
Income tax expense   (158 ) (176 ) (290 ) (275 )
                   
Profit after tax before non-cash items
  606
  683
  1,326
  899
 
                   
Non-cash financial (expense) / income   (12 ) 219   (354 ) 1,249  
       
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